Strict Rules for Regulators on Ties to the Oil Industry

By

Stephen Power

Updated Sept. 1, 2010 12:01 a.m. ET

The Obama administration on Tuesday ordered federal offshore-oil regulators to recuse themselves from official actions involving companies that employ their family members or close friends. It also placed new restrictions on regulators' oversight of companies they once worked for.

ENLARGE

Firefighting crews battle the blazing remnants of the Deepwater Horizon rig after it exploded in April.
Associated Press

The moves by the new director of the Bureau of Ocean Energy Management, Regulation and Enforcement, Michael Bromwich, reflect a broader effort by Washington to sever the links between oil companies and federal regulators in the wake of the BP PLC oil spill in the Gulf of Mexico.

But the rules highlight the challenge Mr. Bromwich faces in pulling apart the ties of friendship, family and culture in the Gulf Coast communities that depend on offshore drilling.

Rig workers and agency employees in the Gulf Coast "have often known one another since childhood," according to a report published earlier this year by the Interior Department's inspector general. The same report found that at one agency office in Louisiana, employees accepted sporting-event tickets, lunches and other gifts earlier this decade from oil and natural-gas companies.

"They work in oil and gas companies offshore, and then come and work for us, and in some cases go back. That's problematic," Mr. Bromwich said in a recent interview.

In a memorandum sent to agency employees Monday, Mr. Bromwich laid out the new rules. Effective immediately, agency employees must report to their superiors "any incident or situation" in which either an industry official or an agency supervisor tries to "harass, coerce, pressure, improperly influence or direct" them in their official duties, the memorandum said.

The rules also prohibit employees from performing any official duties related to a former employer regulated by the agency for two years from the date the employee last worked for the company.

Legislation passed in July by the House would limit the ability of oil and gas regulators at the Interior Department to go to work for the industry, and require the department to certify each year that all employees who have regular contact with oil and gas companies operating on federal land are in full compliance with federal ethics laws. It is unclear whether the Senate will act on the legislation.

A spokeswoman for the National Ocean Industries Association, a Washington-based group that represents offshore oil and gas companies, said it was equally important that the bureau provide sufficient training and pay for inspectors.

In June, Interior's acting inspector general, Mary Kendall, testified before Congress that the bureau had only 60 inspectors for the Gulf region to cover nearly 4,000 facilities, and that the bureau had trouble recruiting inspectors because oil and gas companies paid considerably more than the agency. The Obama administration has said it would boost the bureau's budget and training.

Separately, the Interior Department proposed Tuesday new ethics rules to govern its scientists. The rules would require them to fully disclose their research methods and data, submit their work for peer review and "neither hinder the scientific activities of others nor engage in dishonesty, fraud, deceit, misrepresentation, coercive manipulation or other scientific or research misconduct."

A report published by the Interior's inspector general in April faulted the department for lacking a "comprehensive scientific integrity policy" or any requirement to track scientific-misconduct allegations.

A group that represents employees at Interior said scientists at the department were already subject to discipline and negative performance reviews for scientific deviations and errors, and faulted the new ethics policy for exempting political appointees.

"The scientists within Interior are not the ones rewriting documents inappropriately. Scientific misconduct stems from Interior's political appointees and hand-picked senior managers, but these folks are not covered by the policy," said Jeff Ruch, executive director of Public Employees for Environmental Responsibility.

An Interior spokeswoman said that the proposal was subject to change based on comments that the department receives from the public in the coming weeks, and that the department was soliciting suggestions from scientific organizations on how to improve it.

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